At its meeting this morning, Tuesday, August 11, the Reserve Bank of Australia’s Governing Council unanimously decided to maintain its monetary policy and keep the interest rate unchanged at 4.35%, as expected, for the second consecutive meeting.

The Bank’s policy statement noted that inflation, after declining significantly since its peak in 2022, is expected to rise sharply in the second half of 2025. Information suggests that part of this rise reflects increasing pressure on production capacity and higher fuel prices following the conflict in the Middle East, which could further fuel inflation if it persists. The Council believes there is a significant risk that inflation could remain above the target for a longer period than previously anticipated.

The Council will pay close attention to data and evolving assessments of the outlook and risks to guide its decisions. It will remain focused on its mandate of achieving price stability and full employment and will take whatever measures are necessary to achieve this.